Plenty of uncertainty in Thailand after election<\/p>\n
By Peter Janssen<\/p>\n
BANGKOK (DPA): Thai Rak Thai, the political party of tycoon
\nThaksin Shinawatra, 51, was handed a clear mandate to rule in
\nSaturday's general elections, but their triumph is unlikely to
\nusher in an era of political and economic stability for Thailand.<\/p>\n
Thaksin's party won nearly half of the 500 contested seats in
\nthe House of Representatives, clearing the way for him to become
\nThailand's 23rd prime minister and to push through the host of
\npopular economic policies he has promised the people.<\/p>\n
The closest rivals of Thai Rak Thai (literally -- Thai Love
\nThai), the 30-year-old Democrat Party under incumbent Prime
\nMinister Chuan Leekpai, came in a distant second, slating them
\nfor the opposition.<\/p>\n
\"This is a strong message for the Democrats,\" said Chaiwat
\nKhamchoo, dean of political science at Chulalongkorn University.
\nChuan's coalition government stepped in to save the nation in
\nNovember 1997, after Thailand's entered its most serious
\nfinancial crisis in decades.<\/p>\n
In 1998, despite or partly because of tight fiscal policies
\nrecommended by the International Monetary Fund (IMF), from which
\nThailand borrowed US$17.2 billion, the economy contracted by 11
\npercent.<\/p>\n
By 1999 a slight recovery was already under way with 4 percent
\ngrowth, which was matched again in 2000, driven primarily by a
\ngood export performance. But for the common man on the street and
\nthe average Thai businessman, there is little sign that the good
\ntimes are back.<\/p>\n
\"Chuan hasn't improved the economy. I wanted to give Thaksin a
\nchance to see what he can do,\" said Ngo Sae Tang, a Bangkok
\nvoter.<\/p>\n
Thai Rak Thai (TRT) campaigned on popular policies, such as a
\npromise to provide each of Thailand's 70,000 villages with one
\nmillion baht ($23,000) each in direct development funding and a
\nthree-year debt moratorium for farmers on 300 billion baht ($6.9
\nbillion) in loans from the state-owned Bank of Agriculture and
\nCooperatives (BAAC).<\/p>\n
TRT has also backed the setting up of a state asset management
\ncompany to take over some of the worst debts to Thailand's ailing
\nbank system, a move that would no doubt please the country's
\nbusiness elite.<\/p>\n
Telecommunications tycoon Thaksin, who began the process of
\nforming a coalition government with smaller Thai parties over the
\nweekend, has insisted that TRT be handed control over economic
\nministries, such as finance and commerce, to implement his
\neconomic schemes.<\/p>\n
\"A very challenging path lies ahead for Thaksin, because he
\nhas set such high expectations,\" said Chaiwat. \"He needs to make
\nsure that all these policies will be implemented in a short
\nperiod of time.\"<\/p>\n
Economists have warned that although TRT's rural policies may
\nhave a positive short-term impact on the economy, they have
\nworrisome long-term implications for the country.<\/p>\n
\"I wonder what will happen with the debt moratorium after the
\nthree years are up,\" cautioned Ammar Siamwalla, a senior advisor
\nto the Thailand Development Research Institute (TDRI). \"Because
\nby then farmers will be in the habit of not paying back their
\ndebts.\"<\/p>\n
There is a danger that the estimated 300 billion baht in
\nfarmers' debts to the BAAC will need to be taken on by the
\ngovernment, adding to public debt which already stands at 54
\npercent of gross domestic product (GDP) in the wake of Thailand's
\nrecession years.<\/p>\n
A similar scenario is likely for the asset management company
\nand the $1.6-billion village funding scheme. Thaksin has promised
\nto finance all these programs by improving tax collection, but
\nnot raising taxes.<\/p>\n
\"If he can't make it from taxes then he will need to borrow
\nmoney,\" warned Ammar.<\/p>\n
But Thaksin is under pressure to perform, and it is likely to
\nbe a short act.<\/p>\n
On Dec. 26 the National Counter Corruption Commission (NCCC)
\nindicted the baht billionaire, whose fortune is estimated at 60
\nbillion baht ($140 million) for intentionally concealing his
\nassets with the transfer of millions of dollars worth of company
\nshares to his servants in 1997, when he was deputy premier.<\/p>\n
If the Constitutional Court upholds the NCCC's verdict in
\ncoming months, which is likely, Thaksin will be barred from
\nnational politics for a five-year period.<\/p>\n
He would be forced to immediately resign, as would his entire
\ncabinet, and a new government would be formed, although TRT could
\nstill lead it.<\/p>\n
The uncertainty of Thaksin's political fate has not put him in
\na strong position to lobby for coalition partners in coming
\nweeks.<\/p>\n
His most likely choices are the New Aspiration Party (NAP) and
\nthe Chart Thai Party, which won about 50 seats each. The parties
\nare led by former prime ministers Chavalit Yongchaiyudh and
\nBanharn Sipaarcha, who ran the country between 1995 to 1997,
\nleading up to Thailand's economic collapse in mid-1997.<\/p>",
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